Mah-Kamariyah & Philip Koh (MKP) and Zaid Ibrahim & Co have advised on TMK Chemical’s proposed MYR939.9 million (USD230 million) acquisition of Chemical Company of Malaysia (CCM) from Batu Kawan and its wholly owned subsidiary, Eternal Edge.
The deal comprises MYR438.5 million in cash and 262.5 million newly issued TMK Chemical shares, which will be allotted to Batu Kawan at MYR1.9098 each. TMK Chemical plans to finance the cash element with MYR99.1 million from its IPO, alongside MYR339.45 million from bank borrowings and/or funds generated internally.
Once completed, CCM will become a wholly owned TMK Chemical subsidiary, while Batu Kawan will own about 20.8% of TMK Chemical’s enlarged share capital.
MKP advised TMK Chemical, with the team comprising managing partner Adrian Koh, senior associate Lam Shi Yen and associates Vanessa Liau and Choo Sheau Kee.
“We acted as buy-side legal counsel and advised on all aspects of the transaction, including due diligence on the target company (Chemical Company of Malaysia) and its group of companies and legal documentation,” Koh told Asia Business Law Journal.
Koh said the deal’s size and structure were notable features, saying it was among Malaysia’s largest chemical-sector transactions in recent years.
“It represents the largest value M&A transaction in the chemical sector for several years, undertaken by the largest chemical company (TMK Chemical) listed on Bursa Malaysia,” he said.
“More importantly, it represents a major step in TMK’s vertical integration strategy – combining TMK’s existing chemical trading, storage and logistics capabilities with CCM’s established chemical manufacturing operations.”
Despite the standout aspects of the deal, it also presented several challenges that needed to be addressed.
“From a transaction-execution perspective, one of the key complexities was that this was a related-party transaction, given the relationships between certain substantial shareholders and directors of TMK and Batu Kawan. That necessarily brings with it additional governance, disclosure and approval considerations,” Koh said.
“There is also a takeover-regulatory dimension because Batu Kawan and persons acting in concert with it are expected to collectively hold approximately 57.4% of TMK following the transaction. An exemption from the Securities Commission from the obligation to undertake a mandatory offer is therefore a condition to the transaction.”
Zaid Ibrahim & Co advised Batu Kawan, with senior partner Gilbert Gan spearheading the team. Partner Zukhairi Salehudin and senior associate Adrienne Lim provided additional assistance.
Headquartered in Petaling Jaya, TMK Chemical manufactures, processes, stores and distributes inorganic industrial chemicals in Malaysia and across Southeast Asia. CCM is a manufacturer of organic and inorganic chemicals.
The acquisition is expected to close in the first quarter of 2027.
